College may sue Obama administration over new student loan rules

By eCampus News staff and wire reports

March 14th, 2013

Historically black colleges and universities are not ruling out a lawsuit against the Obama administration over new federal financial aid policies that disproportionately affect their students, the Washington Times reports. New underwriting standards enacted in October 2011 to PLUS loans made it tougher for parents with lackluster credit to borrow money from the federal government for their child’s college expenses. Families of students at HBCUs were twice as likely to use the program, according to the Associated Press, but previous borrowers were not grandfathered in with the old standards. The change meant borrowers who currently hold loans would have their credit evaluated retroactively to cover the previous five years, rather than the previous 90 days, Inside Higher Ed reports. With the policies now in effect and forcing some students out of college, HBCUs are considering legal action over the new rules…